Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The level of the Syldavia market index is 2 1 , 0 0 0 at the start of the year and 2 5 , 5

The level of the Syldavia market index is 21,000 at the start of the year and 25,500 at the end. The dividend yield on the index is 4.2%.
a. What is the return on the index over the year?
b. If the interest rate is 6%, what is the risk premium over the year?
c. If the inflation rate is 8%, what is the real return on the index over the year?
Note: For all requirements, do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places.
Answer is complete but not entirely correct.
\table[[a. Return,25.63vv,%
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Finance

Authors: Alan Parkinson

1st Edition

0750618264, 978-0750618267

More Books

Students also viewed these Finance questions